Big Oil Battles Congress—America Loses

Around 10:30 AM Eastern this morning, just as the five executives of the major global oil companies were settling in for what was set to be a brutal hearing from the House Energy and Commerce Committee, a fire broke out on BP’s Enterprise drilling ship, which is processing thousands of barrels a day of oil diverted from the Gulf of Mexico leak. The fire, which seems to have been caused by a lightning strike, has at least temporarily halted the oil containment process, according to BP—meaning that even as the heads of Big Oil were trying to explain how the biggest environmental disaster in U.S. history had been allowed to happen, oil was again flowing unchecked into the Gulf, at a rate of up to 40,000 barrels a day, if not more, though the company says that it expects production to restart soon.

In Washington, though, the oil executives—the heads of Exxon-Mobil, Chevron, Conoco-Phillips, Shell and McKay from BP—tried to argue that the spill was a terrible but unlikely accident, one that wouldn’t happen again. Unusually, Big Oil broke ranks—in their prepared remarks and in response to House members’ questions, the other oil executives implicitly criticized BP, making the case that the Deepwater Horizon explosion had occurred because of failures on the part of BP. Here’s what Rex Tillerson, the taciturn Texan who heads Exxon-Mobil, had to say in his prepared remarks:

Based on the industry’s extensive experience, what we do know is that when you properly design wells for the range of risk anticipated… follow established procedures… build in layers of redundancy… properly inspect and maintain equipment… train operators… conduct tests and drills… and focus on safe operations and risk management, tragic incidents like the one in the Gulf of Mexico today should not occur.

Responding to a question from Representative Henry Waxman—aka the “Mustache of Justice“—Marvin Odum, who leads Shell’s operations in the U.S., put it in more direct terms. BP’s well “is not a well we would drill,” he said.

But Edward Markey, a Democrat from Massachusetts and a vocal critic of the oil industry, was more concerned about whether any of the oil majors would have been able to handle a well blowout of the sort BP is stumbling through right now. And it seems unlikely any of them could. Markey put up all five corporations’ oil spill response plans and found them “virtually identical,” he said. “All that’s changed is the color of the cover of the plan.” He added:

The plans cite identical response capabilities and tout identical ineffective equipment. In some cases, they use the exact same words. We found that all of these companies, not just BP, made the exact same assurances.

That included some of the same obvious absurdities that reporters had pointed out earlier on BP’s own oil spill response plan, including a mention of walruses as one of the species that could be impacted by a Gulf spill. (“There haven’t been walruses in the Gulf of Mexico,” Markey noted drily, “for about 3 million years.”) That led to perhaps the closest thing to an apology that came out of the entire hearing, from Exxon’s Tillerson: “It’s unfortunate that walruses were included and its embarrassing.”

Duly noted. More to the point, though, Tillerson eventually admitted that Exxon, just like BP, had no real ability to quickly deal with a major underwater well blowout like the one that is occurring right now in the Gulf. Asked by Bart Stupak of Michigan whether Exxon could guarantee that it would prevent a well blowout from adversely affecting the Gulf and its shoreline, Tillerson said he could not:

The answer is when these things happen we are not well equipped to handle them. There will be impacts. We have never represented anything different from that. That’s why the emphasis is on prevention, because when they happen we are not equipped to deal with them.

That had Stupak fuming. “It’s BP this time and it could be Exxon tomorrow,” he said. “The worse case scenario is pie in the sky and oil in the water.”

Stupak’s emulsified metaphors aside, the real work had already been done before the hearing, when Waxman and Stupak sent a letter to BP detailing several areas where they say the company had taken fatal shortcuts that led to the Deepwater Horizon disaster:

They said their investigation is “raising serious questions” about decisions made in the days and hours before the explosion on the drilling rig that sank. According to the committee’s investigation, other decisions also “posed a tradeoff between cost and safety,” including:– BP saved $7 million to $10 million by using a more risky option for the well casing, or steel tubing. The safer method, known as the liner-tieback option, would have provided more barriers to prevent the flow of natural gas up the space between the steel tubes and the well wall.

— BP decided against a nine- to 12-hour procedure known as a “cement bond log” that would have tested the integrity of the cement. Although the company had a team from Schlumberger, a leading oil services firm, onboard the rig, BP sent the team home, saying its services were not needed.

— BP did not fully circulate drilling mud, which would have taken as long as 12 hours. That would have helped detect any pockets of gas, which later shot up the well and exploded on the deck of the drilling rig.

— BP did not secure the connections, or casing hangers, between pipes of different diameters.

Most damning, Waxman and Stupak’s letter dug up internal evidence from BP showing that even some of the company’s own experts were worried about what would happen on the rig. On April 14, just six days before the explosion, BP drilling engineer Brian Morel emailed a colleague saying: “This has been [a] nightmare well which has everyone all over the place.”

In a way, though, the more evidence that comes out showing just how badly BP had mismanaged Deepwater Horizon, the easier it might end up being for the rest of the oil industry to argue that the spill was an isolated accident, the fault of one company. (Of course, that would mean ignoring other accidents like last year’s blowout in the Timor Sea, which spilled for ten weeks, or the repeated problems with blowout preventers—the industry’s main fail-safe—in recent years in the Gulf of Mexico.) With President Barack Obama set to give a prime-time speech tonight on the oil spill and energy, the easy way out would be to put all the blame on BP, rather than acknowledging a frightening reality: the oil industry is drilling deepwater wells without the ability to effectively respond to a blowout, as William Saletan wrote last week in Slate. Given that the U.S. government estimates that some 40 billion barrels of oil may lay in the Gulf’s deepwater deposits, we may decide as a society that the risk is worth it—which is certainly how Big Oil feels. (As BP’s McKay put it at the hearing: “There’s risk in everything.”) Or maybe now is the moment to get serious about breaking the cycle of oil addiction. Either way, it’s Obama’s moment—as long as lightning doesn’t strike.